June 10, 2007

HP'ers, you just know what's coming next



30 comments:

RayNLA said...

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I have been waiting for 6 months for you to mention that FB's will start to resort to arson.

RayNLA

SPECTRE of Deflation said...

Ya, and it ain't gonna be pretty. Rising rates will only make the debacle that much worse. Ugly things like, if I can earn 5.50% to 6.00% interest on my MONEY [real liquidity], is it worth the risk to play the market for an 8% return. The FB's will need a new tag like, "totally f###ed borrower".

Anonymous said...

Who's torching?

Homedebtors?

Bond holders?

Dollar holders?

Stock holders?

Pension funds?

Mutual funds?

Hedge funds?

Banks?

The Fed?

Western civilization?

Anonymous said...

insurance job.........damn, why didn't i think of that? but its too obvious isn't it? unless you hire tony soprano's fire bug to do the job...

Anonymous said...

it's not coming, it's here

http://www.realtytrac.com/ContentManagement/RealEstateNews.aspx?ItemID=2096

Arson gives cash-strapped homeowner hope

did fluffy get out alive? said...

True story: A Michigan county fire department said last week, "We will now be charging home owners (or anybody) a $500 FEE if they call the fire department for help."

Woooooow, but hey, still not a bad deal if you decide to torch your $88K house that you re-fied for $139k. (better yet, just dont call them at all and save the $500!)

How can we dance while our beds our burning? FML

TJH said...

If arson cases were to rise dramatically, this will put insurance companies in a position where they choose who gets paid and who gets denied. I think there will be many more losers than winners, just like in the areas destroyed by hurricane Katrina.

I feel cheated by people who get away with this because one person gets paid and other honest people pay for that one person's payout through higher insurance rates. Secondly, these people were living large through unsound financial instruments (ARMs, interest-only loans) while others chose small housing, using a 15 year fixed loan, something affordable, or those who chose renting in high cost / income locations.

tourch-n-glow said...

Home prices always keep going up, up and up!... (yea, in flames!)

But, but, my realtor said this would be my greatest investment ever!

james said...

Isn't that (arson) unofficially called "Jewish lightening"?

K.W. - Southern Ca. said...

Someone had mentioned in a prior posting that all those with secure jobs (the minority out of the US population) will be "sitting pretty".

Well, I work within the healthcare sector, but I don't believe I or anyone else in these needs-based industries will be that secure either if things keep going as they are.

Does anyone care to comment?

ttt said...

I can see burning down the house if there are major structural defects, but what good would it do for a FB? You would still owe the bank the money once the home is rebuilt. I'd rather mail in the keys and avoid the possible prison time.

burn baby burn said...

Why do you think I chose the name I did? I know how this ends burn baby burn.

Anonymous said...

In some states in the past, arson of your own car was almost an accepted practice.

Benjamin Franklin said...

Well, arson certainly is ONE way to lock in that peak-bubble price, I guess. Yet another reason NOT to sell homes to people who are not emotionally invested into the property, i.e. have no skin in the home. After all, we all know how people like Casey 'cared' about those "can't miss" investment homes, e.g. his Larchmont home, where he allowed the pool to turn into a spa for mosquito larvae breeding West Nile Virus? Ever heard the expression, "biting off more than one can chew?" Amazing the lenders not only ALLOWED this, they BEGGED people to do it!

And since the FB already resorted to mortgage fraud to get INTO the house on the way up (without consequences), they'll no doubt think of insurance fraud is a 'no-cconsequences' way to get OUT of the house, too.

Pretty sad when the Bushie laissez-faire attitude (lack-of-governmental regulation and enforcement) and the "I'm getting mine: screw you other guys" attitude becomes the effective rule of law, huh?

Anonymous said...

This guy was dumb... All you have to do is start a careless smoking habit....

Guy Daley said...

SCHADENFREUDE!!!

Here is a good candidate for arson.

5200 Breese Circle, El Dorado, CA

4800 square foot house sold for 1.6M 10-27-2006. Property taxes are $15,790 a year.

Selling price is down to 1.3M and this is the SECOND time its been on the market, this time for 105 days so far.

Go to zillow check out the house. Its in a neighborhood of big BORG homes inches apart.

Don't fart or the neighbors will call the cops on you for disturbing the peace.

Can you say foreclosure and who's paying those property taxes while its in foreclosure at $1315 per month? not to mention insurance?

Anonymous said...

you have just picked up on this. i have never seen so many fires here for houses under construction or being renovated in years. i do agree with ttt what good will it do. it doesn't absolve anyone of responsibilty for the property and once rebuilt, if new homes are not selling, being new and beautiful obviously is not moving them off the market. i am not sure about insurance law but during the rodney king riots a lot of those desperate store owners set their own properties on fire and said it was the people in the neighborhood. perphaps you can get a good deal with the insurance company if you have a total loss on a fire, but if the house was not worth the money to fix up but if the house was burned up everything coming in is new thanks to your insurance company. there must be a point somewhere.

GOOOGLE SUCKS SAYS SHAKSTER said...

No,I do not know what is coming next.
Now a protracted,bloody civil war with millions dead,property destruction in the trillions,desease,and mass graves isn't out of the picture.
Then Mars Attacks. We're hosed.
Or Not.
Mebby jussa massive housing panic to the downside is all-who knows.

SHAKSTER said...

DUMP GOOGLE!!!!!!

Anonymous said...

Does the insurance company cut a check to the owner, or actually pay for rebuilding directly?

Anonymous said...

if any of you are interested, i would be happy to make this happen for you......i am available at all hours of the day or night. please call me at br 549 and i will be happy to make your problems go away in a sea of flames......just wire the funds to me at john q smith, c/o flamer, inc(no not gay) western union. the cost to you will be a measily $2500.00 thanks. thanks for your interest and your support...

Anonymous said...

This has come in waves with cars people can no longer afford (they never really could afford them in the first place but car salesmen need to get paid). Fuel price spikes are know to precipitate rises in auto arson. (e.g. rash of SUV fires in SO Cal few years back). Insurance companies & authorities actually monitor rashes of auto fires to detect fraud based arson claims.

I'm sure we will see the same trend in home fires over the next few years and the insurance industry will be tempted to just use it as an easy excuse to not pay on a claim.

Roccman said...

"No,I do not know what is coming next."

I do

www.dieoff.org

Shakster said...

FBs= Phukt Builders.They are the ones who do it first.

kitchenstove said...

Pick your favorite dystopian novel, show, or movie, and prepare for it accordingly.

Former Insurance Adjuster said...

Does the insurance company cut a check to the owner, or actually pay for rebuilding directly?

Insurance companies are obligated to pay the "legal owner"...in this case it would be the bank so both the bank and the insured would be named on the check. The payout would equal the cost of rebuilding (never mind the contents portion for this example).

The following is just a hypothetical example and isn't as intricate as an actual claim would be.

So...let's say that someone bought a $1,000,000 McMansion and the value of the land is half of that.

House Burns Down.

Insurance pays $500k to the insured and the lienholder.

The owner is still on the hook for the $500k price of the land as land is not insured.

Too bad that the land will only be worth $250k so it really won't help someone by burning down their house.

Also, Insurance companies investigate the hell out of arson related losses in conjunction with the NICB (National Insurance Crime Bureau) the Police, Fire Department and anybody else that they choose to bring to the table.

I'd be willing to bet that less than 1% of people actually have read their policies. And that includes HPers.

READ YOUR DAMN INSURANCE POLICY!!!

reit said...

don't you still owe the bank the same amount of money even if your house burns down? Let's say you borrowed $800K for a house in Clownifornia (house=$300K;land=$500K) and it mysteriously burns to the ground. The insurance company will only pay you (the bank) $300K to rebuild the house. The only way out is a short sell or foreclosure.

Anonymous said...

Watch what happens when the consumer stops buying...

Anonymous said...

Often times the cost to rebuild exceeds one's coverage which is pegged at assessed value.

Thus many properties stand as empty lots because the morgage gets paid off/down after the claim is settled & the owner short sells the property to someone who has the means to rebuild.

Some owner's that come away clean (buying coverage in excess of the assessed value) then take out a contruction loan to rebuild, but I think we're going to see alot of desperate people torching and being left holding the bag one way or another and learn they had inadequate coverage and that the field expidient solution the arrived at wasn't!!

Anonymous said...

Arson, the new wave. remember Brooklyn in the 70's / 80's and the "burned down Bronx" (New York)